W hat portion of this amount c ons titutes revenue

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Unformatted text preview: this amount c ons titutes revenue earned in J anuary? (Om it the "$" sign in your re sponse .) Revenue earned $ 15,000 W orksheet Learning Objective: 04-03 Prepare adjus ting entries to convert as s ets to expens es . Learning Objective: 04-06 Prepare adjus ting entries to accrue uncollected revenue. Learning Objective: 04-01 Explain the purpos e of adjus ting entries . Learning Objective: 04-04 Prepare adjus ting entries to convert liabilities to revenue. Learning Objective: 04-07 Explain how the principles of realization and m atching relate to adjus ting entries . Learning Objective: 04-02 Des cribe and prepare the four bas ic types of adjus ting entries . Learning Objective: 04-05 Prepare adjus ting entries to accrue unpaid expens es . The geologic al c ons ulting firm of Gilbert, Mars h, & Kes ter prepares adjus ting entries on a monthly bas is . Among the items requiring adjus tment on Dec ember 31, 2011, are the following: 1. The c ompany has outs tanding a $50,000, 9 perc ent, two-y ear note pay able is s ued on July 1, 2010. Pay ment of the $50,000 note, plus all ac c rued interes t for the two-y ear loan period, is due in full on June 30, 2012. 2. The firm is providing c ons ulting s ervic es to Tex as Oil Company at an agreed-upon rate of $1,000 per day . At Dec ember 31, 10 day s of unbilled c ons ulting s ervic es have been provided. a . Prepare the two adjus ting entries required on Dec ember 31 to rec ord the ac c rued interes t ex pens e and the ac c rued c ons ulting revenue earned. (Do not round inte rm e dia te ca lcula tions. Round your a nsw e rs to the ne a re st w hole dolla r. Om it the "$" sign in your re sponse .) General Journal 1. Interes t ex pens e Debit Credit 375 Interes t pay able 2. 375 Ac c ounts rec eivable 10,000 Cons ulting fees earned 10,000 b. As s ume that the $50,000 note pay able plus all ac c rued interes t are paid in full on June 30, 2012. W hat portion of the total interes t ex pens e as s oc iated with this note will be reported in the firm's 2012 inc ome s tatement? (Om it the "$" sign in your re sponse .) Total interes t $ 2,250 c. As s ume that on January 30, 2012, Gilbert, Mars h, & Kes ter rec eive $25,000 from Tex as Oil Company in full pay ment of the c ons ulting s ervic es provided in Dec ember and January . W hat portion of this amount c ons titutes revenue earned in J anuary? (Om it the "$" sign in your re sponse .) Revenue earned $ 15,000 Explanation: a. Interes t ex pens e = $50,000 × 9% annual rate × 1/12 = $375. b. Total interes t = $50,000 × 9% × 6/12 = $2,250. c . Revenue earneed = ($25,000 – $10,000 earned in Dec ember) = $15,000. http://ezto.mhecloud.mcg r aw- hill.com/hm_accounting .tpx?todo= pr intview 5/16 1/23/2014 6. Assig nment Pr int View aw ar d: 1 out of 1.00 point W hen Americ an Airlines s ells tic k ets for future flights , it debits Cas h and c redits an ac c ount entitled Air Traffic Liability (as oppos ed to c rediting Pas s enger Revenue...
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This note was uploaded on 01/23/2014 for the course ACC 111 taught by Professor Angela during the Fall '08 term at Delaware County CC.

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